I Spy

In the old days, keeping an eye on the competition meant paying attention to mundane details from mundane sources, keeping your eyes and ears open, and listening to salespeople, suppliers, and customers. It was a lot of hard work, and not particularly glamorous.

Today, in the age of the Net, the temptation is to think that because so much information is on line, you just need to click a few buttons and -- shazaam! -- everything there is to know about competitors will suddenly appear on the screen. In fact, gathering intelligence still means working hard and paying attention to lots of details.

The Internet has shortened the time it takes to gather that information and allowed businesses access to ever-more-current information about what the other guys are up to. But the more information you have, the greater the task of sorting out what information is really useful and what will give you a leg up on the competition. Not all intelligence is competitive intelligence, and finding data is much easier than correctly interpreting it.

Competitive intelligence expert Leonard Fuld, founder and president of Fuld & Company, asks this question of participants in his seminars: How did the curator of the Chicago Museum of Science and Industry discover that the hatching chick was the most popular exhibit in the entire museum?

The answer: He heard a maintenance person mention that the floor tiles throughout the museum were in fine shape, but those around the chick exhibit needed to be replaced every few weeks because of the heavy foot traffic. A worn tile can be just a worn tile, but it can also be the answer to an important question and can help shape an organization's strategy.

By virtue of having worked with a variety of companies, competitive intelligence firms like Fuld's have the advantage of being able to see the "big picture" (see the "Want to Hire a Pro?" sidebar for more details on professional CI companies). But with the right tools any business can assemble a good collection of useful competitive intelligence itself. Some research methods are obvious, others more obscure. Regardless of which tools you choose, don't assume that information found on the Internet is either accurate or complete.

START WITH THE BASICS

It's easy to overlook the simplest competitive intelligence activities you can conduct on the Net -- like checking out a competitor's Web site. "Often, a company's Web site is a gold mine," says Helene Kassler, Fuld & Company's director of library and information services. "Follow every link and scour the pages. You never know what you'll turn up." Kassler also stresses the importance of getting a company's annual report before leaving their Web site. If that's not possible, you might be able to get the report from the Public Register's Annual Report Service (www.prars.com), which makes available the annual reports of more than 3,600 public companies.

If the company you're researching is public, it's wise to view the SEC filings. The U.S. Securities and Exchange Commission mandates that public companies reveal background, financial, and other information of importance to investors. You can check out the SEC site (www.sec.gov) or visit EdgarOnline (www.edgar-online.com), which offers a wealth of information (some free, some paid) regarding SEC filings, insider trading, litigation, and other key information. Such tools are important, because they give insight into what top executives at companies are doing and highlight the "digital trails" that companies leave as they transact business and interact with government agencies.

When you're out there getting the skinny on potential competitors, remember to cast a wide net. Think about potential threats from companies that you might not usually consider and keep an eye on them. "Usually companies are thinking about this in terms of direct competitors -- who they bid against," says Eric Johnson, an analyst with Information Uncover. "But very often, the most threatening competitors aren't your direct competitors."

CAVEAT INVESTIGATOR

"There's a torrent of information on the Net," says Leonard Fuld. "But a lot of it is spurious or in pieces that are taken out of context. People tend to add their own interpretation as information gets passed along through discussion groups, Usenet newsgroups, and chat boards. It's like the old children's game of telephone -- the message gets distorted."

Kassler puts it this way: "If location, location, location, is the mantra of the real estate world, then validate, validate, validate is the mantra for competitive intelligence when the information comes from the Internet."

Another aspect of accuracy concerns the source. The various press release wire services, such as PR Newswire and Businesswire, are good repositories of corporate press releases. You'll also generally find press releases or a "news center" on competitors' sites. The releases are worth a look, but don't forget that they're essentially propaganda controlled by the companies that issue them. Nonetheless, they can provide historical data points that become part of your interpretation.

What you don't find on the Web will come from primary sources -- conversations with people who can fill in blanks and provide first-hand experience, or documents that you have to track down yourself and investigate. Even for these sources, the Web can give you a starting point. For example, conversations with a competitor's former employees are incredibly useful. "You can go to monster.com and find a person who said he or she was a former employee of XYZ Corporation," Johnson says. "They may tell you lots or nothing -- the ethical guideline is to be honest up front about who you are and what you're doing."

The Web is also beginning to be useful for tracking down documents such as UCC (Uniform Commercial Code) filings, which reveal a lendee company's physical assets (and are used by lenders who want to know what they can claim in the event of a default). "By learning what equipment a company might have, you can sometimes piece together what a company is working on," Kassler says. She points out that Arizona is one of the few places where you can read UCC filings on line, but is confident that in the future, more states will digitize the forms and make them available. That will be another opportunity to gain potentially valuable competitive data over the Net.

GET YOUR DATA IN THE RIGHT HANDS

Competitive intelligence experts stress that you don't need to have an advanced degree or computer driven tools to analyze your competitive data, though they can help. What you really need are people with the right expertise looking at the right data. That's why you shouldn't overanalyze data before presenting it to others in your company. The idea is to expose people to relevant raw data and help them draw conclusions. People from management, engineering, sales, and procurement will all see data a little differently.

Finally, consider competitive intelligence to be an ongoing activity rather than a particular project. The need for ongoing data points will continue to grow as the competitive arena changes, new technologies arrive or become obsolescent, and the marketplace evolves. The Net can help you keep up if you choose the right tools and learn to interpret data in ways that can help your company gain a powerful advantage.

FIVE STEPS TO CI

In general, CI use a five-step process to conduct a competitive analysis for their clients. While you may be able to combine some of the steps, it's useful to know what the pros do and how the Internet can help you as you piece together the competitive landscape.

1. Planning and direction. What types of activities will you use to gather the information? What do you need the competitive intelligence for -- the long-term ("Is Microsoft coming out with a new operating system? If so, we'd better plan for it.") or the short-term ("Will our direct competitor be selling a similar widget next week?"). "The Internet won't help you with this phase," Information Uncover's Johnson says. "This is about planning for a meaningful investigation."

2. Collection and research. This is where the Internet shines in the CI process, given the number of databases and specialized search engines that can help you pinpoint and retrieve useful information. Many excellent tools are available that can provide you with good data points, but be aware that what's available is only 75 percent of what you need to know to do a thorough competitive analysis. The rest must be gotten through good old-fashioned digging, interviewing, and putting two and two together.

3. Analysis and production. There are many ways to present the intelligence once you have it, and it's important to do so in a way that transforms raw data into useful information. This is essentially where the rubber meets the road.

Raw data in and of itself won't help you make decisions: it's the interpretation that counts. Whether you try doing competitive intelligence via the Net or hire a professional, you'll need to explain to your team the various options and make recommendations about how to use the intelligence.

4. Storage and processing. At some point, you will want to archive the analyzed information for later retrieval. The Net, with its myriad backup services (such as Driveway and Xdrive) may be useful for that purpose.

5. Dissemination and delivery. Different people in your organization will have different information needs. Giving a monthly briefing to your salespeople is different from giving a single 10-minute briefing to an executive. It's important to package the information in a way that's appropriate for whomever the listener might be.

INTELLIGENCE IN YOUR IN-BOX

While traditional search engines are designed to allow you to locate information on the Web, a number of search tools can keep you up to date as the competitive landscape changes. The Informant and Tracer Lock will notify users via e-mail when they find new information on a topic after your initial search. Of the traditional search engines, Northern Light is the first to offer e-mail information tracking services. In addition, a service called NetMind enables you to monitor and track changes on particular Web sites, say those of direct or indirect competitors. Static information will give you a starting point or lead based on a slice in time; dynamically searched information over time provides you with fresh leads and data points that can give you a more accurate picture of what your competition is doing.

One search and notify tool that's particularly popular among CI specialists and general company information seekers is Company Sleuth. This search and notification tool trolls the Web repeatedly looking for new or updated information about a company you're researching, then e-mails you new findings. It's free to users and can provide a great deal of valuable data in 25 categories, such as patents, trademarks, domain registrations, job postings, and other sources of useful information.

One Company Sleuth customer, a maker of consumer goods, learned that a competitor's job postings suddenly surged in a certain geographical area. By studying the requirements of the job postings, the Company Sleuth user was able to deduce that the competitor was going to do a test of certain product types in that region and alerted its own sales force to that possibility. The sales force used its six-month lead-time wisely to prepare its own defense and counter-strike.

SEARCH AND NOTIFY TOOLS

The Informant

informant.dartmouth.edu

TracerLock

peacefire.org/tracerlock

NetMind

www.netmind.com/html/individual.html

Company Sleuth

www.company.sleuth.com

WANT TO HIRE A PRO?

While there are a number of excellent CI-related tools at your disposal on the Internet, a professional CI firm can bring tremendous added value. If your research concerns a "you-bet-the-company" action -- a major new product or service launch, strategic shift, or marketing campaign, the money is well worth spending to protect your investment.

Professional CI firms can conduct an investigation more efficiently, especially when primary searching is involved; they have industry-specific experience structuring and conducting field research. They can also leverage the research and investigative materials they've acquired for other projects. Most important, they have an objectivity that is hard to find in your own organization.

FINDING A CI FIRM

Fuld & Company, Inc.

www.fuld.com

Information Uncover

www.informationuncover.com

The Society of Competitive Intelligence Professionals

is an excellent place to start selecting a CI firm.

www.scip.org/marketplace

THE HIDDEN WEB

Like CI analyst Eric Johnson, Fuld & Company's Helene Kassler stresses that what you find on the Web is only part of what's available. Bizjournals.com, for example, owns 41 business-related newspapers and journals and can provide useful information, but the site isn't indexed on the search engines. Similarly, there are other key information sources that you can find on line, but only if you happen to know what they are, since they're not indexed by search engines (database search engines and other search tools typically can't index certain document formats, such as ".PDF," Adobe Acrobat Reader, or ".ASP" pages, Web pages created on the fly that only exist while you view them). In addition, some databases can only be accessed by first filling out a form, which stops search tools dead in their tracks. Finally, not all search tools dig down deep enough within pages. Much information can be missed if a page drills down 20 levels and the search tool only indexes two. The bottom line is, you don't see what Kassler calls "The Hidden Web."

So check out newsgroups, listservs, and Yahoo chat boards to learn what customers are saying about companies from which they purchase goods and services. (Deja.com and Chubba.com index newsgroups; liszt.com indexes listservs and newsgroups.) Remember that the information may very well be inaccurate or even wrong and deliberately placed, but at the same time, you might come across legitimate posts that reflect your competition's customer satisfaction levels. It's even worthwhile checking out "innuendo" sites of the "soandsosucks.com" variety. Again, the information at these sites should be treated with great suspicion but is worth plowing through for any data points that resonate with information gleaned from other sources.

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